by: Gordon Lawrence
_________________________________________________________________
Location: Conference Room on 44th floor at Doppler
Attendees: Six Amazon Executives
(Speaker: Vandy Balinshar / Amazon Director of Financial Services)
_________________________________________________________________
“Thanks for your time.”
“Has everyone completed the six page preread?”
“Great. I will give you a brief summary and then request your input.”
“Your Bank will offer financial services to all of our Amazon members.”
“For individuals, we will offer checking, savings, investments, insurance, retirement accounts, direct deposit, bill pay, mortgages and wealth management.”
“For small businesses, we will offer all the needed financial services, including merchant services and loans, which has been successfully initiated, and will ramp up the volume.”
“Your Bank gives us unprecedented data which enables us to better serve the needs of our members.”
“Also, we have the very best opportunity to build trust; safeguarding members money transcends everything else on the scale of importance in a relationship. I should add that our initial member input meetings showed that a trusted bank relationship was the top request when we listed possible new benefits for members.”
“We will purchase a small bank and operate online only, following established precedent by Ally Bank, Bank of the Internet, Everbank, First Internet Bank, Bank 5 Connect, FNBO and others.”
“Trust is priority one now and will always be priority one to members. Understanding that, we will also offer excellent rates on deposits, about 1.25% which is 100 bp above average deposit rates. We will offer market leading rates on loans.”
“We will offer a call to action with free Prime service, testing six and twelve months. Existing Prime members will receive an additional twelve or six months. We will also test six months upgrade to unlimited music and a free rental movie.”
“The ROE is north of 19% and our payback is 17 months; these projections are approved by the controller and are in section R of your package.”
“I love this product; our team has been working on it full time for 4 months. We’re passionate and we’re ready to fire up the alpha. And my time is up so I’ll stop here and answer your questions.”
Q1: “Is Your Bank Credit Cards Competition to our Chase Card?”
A: (All Answers by Vandy Balinshar) “Complimentary, not Competition. We told Chase from the start that when we have exclusivity with all the purchasing by members then they will have exclusivity with our members for credit card choice. So our members will have a choice.”
Q2: “Will Your Bank have in-person banking?”
A: No. We meet all of the needs on-line.
Q3: “How About Mutual Funds? ETF’s?
A: ETF’s from the start.
Q3: “What Will the Funds, Deposited by Our Members, Be Used For?”
A: “To finance debt. To finance company expenses. To replace going to the market for funding. If we had started five years ago, we could have self-funded Whole Foods (laughs).
Q4: “The Projected Savings for the Interchange are Surely Overstated. How Will You Negotiate Incredibly Lower Rates”
A: Thanks for the question. We don’t use the interchange. We don’t use Visa, MasterCard, Amex or Discover. Your Bank transfers funds internally. Remember that we are the depository of the member’s paycheck. The funds are transferred internally to the provider of goods or services. This starts with all purchases on the platform: in-house Whole Foods and extends to our third party sellers on the platform. We will add large companies to the platform, offering transactions at a fraction of the interchange. And we will market directly to our members, who will use “Your Bank” as their payment method of choice.
Q5: Explain the Initial Testing.
A: "Amazon team members will be selected to use the service. And that includes everyone here. Your accounts are ready to use."
Q6: “You Are Telling Us That We Will Have Our Own Credit Card System?”
A: I”m saying that we will have our own instant funds transfer system. Your Bank members will deposit their paycheck automatically with us. We will use those funds - in nanoseconds - to fund purchases, or fund debt, or fund internal projects. Our sellers, Third parties, will receive funding in real time for completed purchases in comparison to days for interchange. Our cost is de minimis.”
Q7: “We’re Going to Save Billions.”
A: “I think of it as cost avoidance and low cost funding for the Company. See section R for the details."
Let’s Take One More Question:
Q8: “Could the Payment Platform Be Extended?”
A: “That’s Phase two. Yes, indeed, Your Bank is ideal for all third parties to process payments at a fraction of the interchange fees."
“Does anyone have an objection to proceeding with the test?"
"Seeing none, I thank you for your time and input and we will reconvene in about two weeks with an update.”
Thanks again.”
_________________________________________________________________
Location: Conference Room on 44th floor at Doppler
Attendees: Six Amazon Executives
(Speaker: Vandy Balinshar / Amazon Director of Financial Services)
_________________________________________________________________
“Thanks for your time.”
“Has everyone completed the six page preread?”
“Great. I will give you a brief summary and then request your input.”
“Your Bank will offer financial services to all of our Amazon members.”
“For individuals, we will offer checking, savings, investments, insurance, retirement accounts, direct deposit, bill pay, mortgages and wealth management.”
“For small businesses, we will offer all the needed financial services, including merchant services and loans, which has been successfully initiated, and will ramp up the volume.”
“Your Bank gives us unprecedented data which enables us to better serve the needs of our members.”
“Also, we have the very best opportunity to build trust; safeguarding members money transcends everything else on the scale of importance in a relationship. I should add that our initial member input meetings showed that a trusted bank relationship was the top request when we listed possible new benefits for members.”
“We will purchase a small bank and operate online only, following established precedent by Ally Bank, Bank of the Internet, Everbank, First Internet Bank, Bank 5 Connect, FNBO and others.”
“Trust is priority one now and will always be priority one to members. Understanding that, we will also offer excellent rates on deposits, about 1.25% which is 100 bp above average deposit rates. We will offer market leading rates on loans.”
“We will offer a call to action with free Prime service, testing six and twelve months. Existing Prime members will receive an additional twelve or six months. We will also test six months upgrade to unlimited music and a free rental movie.”
“The ROE is north of 19% and our payback is 17 months; these projections are approved by the controller and are in section R of your package.”
“I love this product; our team has been working on it full time for 4 months. We’re passionate and we’re ready to fire up the alpha. And my time is up so I’ll stop here and answer your questions.”
Q1: “Is Your Bank Credit Cards Competition to our Chase Card?”
A: (All Answers by Vandy Balinshar) “Complimentary, not Competition. We told Chase from the start that when we have exclusivity with all the purchasing by members then they will have exclusivity with our members for credit card choice. So our members will have a choice.”
Q2: “Will Your Bank have in-person banking?”
A: No. We meet all of the needs on-line.
Q3: “How About Mutual Funds? ETF’s?
A: ETF’s from the start.
Q3: “What Will the Funds, Deposited by Our Members, Be Used For?”
A: “To finance debt. To finance company expenses. To replace going to the market for funding. If we had started five years ago, we could have self-funded Whole Foods (laughs).
Q4: “The Projected Savings for the Interchange are Surely Overstated. How Will You Negotiate Incredibly Lower Rates”
A: Thanks for the question. We don’t use the interchange. We don’t use Visa, MasterCard, Amex or Discover. Your Bank transfers funds internally. Remember that we are the depository of the member’s paycheck. The funds are transferred internally to the provider of goods or services. This starts with all purchases on the platform: in-house Whole Foods and extends to our third party sellers on the platform. We will add large companies to the platform, offering transactions at a fraction of the interchange. And we will market directly to our members, who will use “Your Bank” as their payment method of choice.
Q5: Explain the Initial Testing.
A: "Amazon team members will be selected to use the service. And that includes everyone here. Your accounts are ready to use."
Q6: “You Are Telling Us That We Will Have Our Own Credit Card System?”
A: I”m saying that we will have our own instant funds transfer system. Your Bank members will deposit their paycheck automatically with us. We will use those funds - in nanoseconds - to fund purchases, or fund debt, or fund internal projects. Our sellers, Third parties, will receive funding in real time for completed purchases in comparison to days for interchange. Our cost is de minimis.”
Q7: “We’re Going to Save Billions.”
A: “I think of it as cost avoidance and low cost funding for the Company. See section R for the details."
Let’s Take One More Question:
Q8: “Could the Payment Platform Be Extended?”
A: “That’s Phase two. Yes, indeed, Your Bank is ideal for all third parties to process payments at a fraction of the interchange fees."
“Does anyone have an objection to proceeding with the test?"
"Seeing none, I thank you for your time and input and we will reconvene in about two weeks with an update.”
Thanks again.”
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